According to a new poll of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to support their budgets, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will need to increase council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
Research of county councils this week also found local finances being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, many participating urban areas were included in the most deprived in England.
- “Member cities like several major towns rank in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the study found.
